THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

[11:00:16]

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. We begin with breaking news. As the clock ticks down to President Trump's 100th day in office, sources are now telling CNN there may be a possible breakthrough in the talks over health care.

You'll remember just weeks ago, an agreement seemed dead and then some after the president and the Republican Party failed to get to yes on a plan to replace Obamacare. Never even taking the bill to the House floor for a vote because things unraveled so quickly.

Well, now, signs of life. The White House pushing a new round of negotiations and the various factions within the Republican Party appear to be making some kind of progress. Is that what the president was hinting at when he said this Tuesday?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: We are going to have a big win soon, because we're going to have health care, and I believe that's going to happen. And you know, there was no, like, loss with health care. This is just a constant negotiation and the plan is getting better and better all the time.

(END VIDEO CLIP)

BOLDUAN: Let's get to the state of play right now, though. CNN's national politics reporter, M.J. Lee is here with much more. So, M.J., lay it out for us. Where exactly is the compromise, if we can call it that, and who exactly is on board right now?

M.J. LEE, CNN NATIONAL POLITICS REPORTER: So, there are signs of a possible breakthrough on health care, emphasis on possible. What we know is that leaders of this Tuesday Group as well as the House Freedom Caucus have been in talks over the Easter recess to try to revive the first failed health care bill that was pulled from the House floor.

Now, what the members are trying to work on now is a deal that could potentially bring on board 18 to 20 new yes votes from the House Freedom Caucus. Now, I just spoke a little while ago with Republican Congressman Tom Cole, and he tells me that the differences have narrowed, and this thing is very much alive.

Now, just to walk you back a little bit, remember, it was exactly a month ago that the House bill was pulled from the floor because leadership could not get enough conservatives as well as moderates on board to get to the 216-vote threshold.

Now, clearly, the White House's thinking at the time was that if we do not get it done this time, there will not be another try. That thinking has shifted and we know that Vice President Mike Pence has been very much involved in trying to have more conversations with members of the House Republican Conference.

Now, there are some serious obstacles heading into next week. As you know, Kate, members have to deal with the problem of funding the government, and that is sort of their first priority.

And we also know that the existing split between the conservative faction as well as the moderates, that continues to sort of be a problem as they try to get to the 216 votes. So, we'll see if any sort of real breakthrough comes before members come back next week -- Kate.

BOLDUAN: Yes, where deadlines haven't helped them in the past with this new administration, it seems they're setting now more deadlines on themselves. Let's see where this goes. M.J., great to see you. Thanks so much.

Things are moving rapidly on this, but they could also stop quickly. Let's talk about it. Jon Selib is here, former chief of staff to former Senator Max Bachus of Montana. He was a key player in writing and passing Obamacare way back when.

David Drucker is also here, CNN political analyst and senior congressional correspondent for "The Washington Examiner," and Alice Stewart, a CNN political commentator and Republican strategist.

So, Alice, first to you. As you're reading the tea leaves and you're talking to all the whispers going on in Washington, are you ready to say you've got a breakthrough?

ALICE STEWART, CNN POLITICAL COMMENTATOR: We certainly have some progress. I'll go that far. Look, right now there is a call going on between the more conservative wing of the Republican Party, the House Freedom Caucus, and the Tuesday Group, which is the more moderate, and they're trying to come to a consensus on this massive bill, and they feel as though they're closer.

One of the key holdups is what is called the limited waiver, and this would be, if they come to agreement on this, it's great progress. This would allow states the option of opting out of certain aspects of this bill.

There is also the overall marketplace, which continues what is very popular amongst people, which is allowing kids to stay on their parents' health insurance until they're 26 and also keeping in the pre-existing conditions option.

And right now, from what I'm hearing, Mike Pence, while he's busy with foreign policy, he is really driving this train here, making sure that they get something on the table.

They would like to have a victory or some signs of victory before they get to 100 days, and this would be a good step forward in that process.

BOLDUAN: Right, but exactly, they wanted this victory back in March, though, Alice. I mean, David, isn't some of what we're laying out here as the possible points of compromise, aren't these the exact issues that tripped them up the last time? What do you sense is different?

DAVID DRUCKER, CNN POLITICAL ANALYST: Well, what I know is different is that in talking to people that have been involved with this, they do believe that they are coming together around an emerging framework for a compromise.

[11:05:11]What they caution is that they don't know how this is going to be received by rank and file members within the various factions of the House Republican Conference --

BOLDUAN: Which is a huge deal, right?

DRUCKER: Well, of course, once it's presented, because what Republicans are trying to do, and John will understand this, Alice will as well, of course, is they're trying to keep everything that people like about Obamacare and remove everything that people don't like, and that creates a real policy conundrum.

We will know more on Saturday, possibly, after House Republicans convene in a conference-wide conference call a couple days ahead of returning to Washington from their spring break, and that may tell us where they are.

But don't forget, Kate, if they're able to come together on this in concept, it's still going to have to go into legislative language. I'm sure a lot of people will want to see a CBO score, and we'll see if it's able to sort of survive all that and get to a point where they can actually vote on it.

BOLDUAN: Jon, take us -- I don't know if you're having, again, some fun flashbacks here, but take me inside. You've got basically a couple members who think that they've reached some kind of formation, formulation that kind of, like, threads the needle, even though these are topics that were discussed that they could not get to yes on the first time around.

How does this play out in your mind? You've got members talking to each other. Then they have to go back and talk to the various factions, and then they need to come back to Capitol Hill. There seems to be a lot of variables that could happen before they get there.

JON SELIB, FORMER CHIEF OF STAFF TO SENATOR MAX BAUCUS: I think that's absolutely right and look, let's go back to the fundamentals here. This bill, at least what's being discussed and what we know about so far, is fundamentally the same bill that was being discussed before. There are massive Medicaid cuts that are going to make governors very unhappy, including Republican governors --

BOLDUAN: Which are making some moderates very unhappy.

SELIB: And many moderates very unhappy. And actually something that a lot of very conservative members of Congress have gotten a lot of guff for when they've gone back and done town halls across the country. So, that's still a massive problem for them in gathering votes.

And you know, allowing states to opt out of essential benefits, they can say that they want to keep protecting people with pre-existing conditions, but if you get rid of these essential benefits, you know, you're going to allow insurance companies to sell plans that don't cover things like hospitalizations or pregnancy or other things that --

BOLDUAN: Maybe, yes, I mean, maybe?

SELIB: Maybe.

BOLDUAN: And that's part of it, right. But again, this is stuff that tripped them up. It's something -- if it isn't the details of the bill, it seems, Alice, something has changed here. Do you think that something is maybe what Jon was pointing to right there? Do you think that it's the pressure on them? Maybe did they go home to their districts and were scared straight by their constituents that they want to see them get something done?

STEWART: There was a willingness on all sides, Kate, to get something done the first time, but it just wasn't right. I know that the House Freedom Caucus members, they campaigned and they promised -- all of the Republicans campaigned and promised on repealing and replacing Obamacare.

They told their constituents, this would mean lower premiums and greater access to care. House Freedom Caucus members didn't feel that was part of this first plan on the table. The MacArthur amendment, which they're discussing now, they feel is a better step in that direction.

They're not concerned about getting pushback here in Washington. They're not concerned about whether or not President Trump tweets angry things about them. They are concerned about going back to their districts and their constituents being frustrated.

And what they heard when they went back, their constituents were thankful they stood firm against this first option, and they are encouraged by what they're seeing with this new amendment, and that's what their number one priority is. Everyone wants to come to yes. This is what they campaigned and won on. It's just a matter of how they got there.

DRUCKER: Kate, I do think there is some outside pressure from the fact that the Obamacare health care system right now does have a lot of pressure on it where you have insurance groups pulling out of markets, you have premiums that are rising.

Republicans are going to have to address that one way or the other, because politically, it no longer works to blame Obamacare now that they're in charge of all of government and they have campaigned on doing something about this. So, that is I think a pressure that is real, that could be driving this.

BOLDUAN: And here's the other complicating thing. We have to leave it here. The complicating thing is when they come back, they've got other problems to deal with, keeping the government funded.

So, where that plays into negotiations, they've got bigger problems because the Senate could be facing a bigger issue. I don't know if that's a bigger issue now that I think about it, keeping the government funded or getting their health care promise through. I'll leave that to you all to decide. Great to see you, Jon, David, Alice. Thanks, guys. Thanks so much.

STEWART: Thanks, Kate.

SELIB: Thank you.

BOLDUAN: Breaking new details on Bill O'Reilly's exit from Fox News a day after Fox News fired him amid sexual harassment allegations. The question now, how golden is your parachute? That's next.

[11:10:07]Plus, how's this for irony? The judge that Donald Trump attacked during the election for his Mexican heritage, comments that even Paul Ryan called the textbook definition of racism, well, that same judge is now presiding over a major immigration case against the Trump administration. That's ahead.

And President Trump continues to stare down North Korea. Startling, new images, though, are also coming out of a North Korean nuclear test site showing people playing volleyball. Not kidding. What does that mean? We'll be right back.

(COMMERCIAL BREAK)

BOLDUAN: Executives at Fox News headquarters have reportedly been meeting all morning discussing how the network moves forward after announcing the face of the network and the most highly rated anchor, Bill O'Reilly, is out.

Now new details are coming out about just how much O'Reilly is being paid to basically go away. CNN media correspondent and host of "RELIABLE SOURCES," Brian Stelter is here. How much money are we talking? How much of a payout are we talking about now, Brian?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Tens of millions of dollars. We know that because O'Reilly's contract, his brand-new contract, was worth $25 million a year, this according to sources on both sides of this deal. So, $25 million a year for the next four years. You do the math, that's $100 million. Now, Fox is not going to pay the entire thing.

BOLDUAN: Right.

[11:15:08]STELTER: But I'm told at least several tens of millions of dollars will be going to O'Reilly. Why? Because the network, you know, did this deal in March, just a few weeks before "The New York Times" wrote about these harassment allegations.

BOLDUAN: That's right. That's right.

STELTER: It was a brand-new contract. On the one hand, the network felt it owed him something. You know, he helped build Fox News into what it is today. On the other hand, it could no longer stand by him amid this investigation.

BOLDUAN: So can you give us a little window into this board meeting going on at Fox News? You've got this board meeting going on, you've also now got a federal investigation going on --

STELTER: Right.

BOLDUAN: -- into talking about money and payouts and settlements, it's going into that. How does this all play?

STELTER: Essentially, Fox called in a law firm two weeks ago to look into O'Reilly. And whenever a law firm is called in, that's not a good sign for the person being investigated. This law firm comes in, provides a report to the board of directors, the people that run the company.

The board of directors agreed that O'Reilly had to go. That law firm also looked into Roger Ailes last summer. He resigned under pressure, got $40 million. So, in both cases, you have these big payouts.

And partly, the feds are looking at whether the Ailes settlements were properly disclosed or not. The feds might be looking at other elements of Fox News as well. We don't have a lot of visibility into this very secretive investigations.

But the board of directors has to be concerned about exactly what could come out next. We are not at the end of this, not by a long stretch. We're in the middle of what is essentially a crisis involving the culture at Fox News.

BOLDUAN: With him out, though, does it nip a lot of it in the bud, though? Like, I mean, how the fallout --

STELTER: Well, the Murdochs are signaling they're trying to do the right thing, trying to clean up the house, trying to put the past in the past and make a cleaner future. However, there's a lot of questions about who knew what when, and those questions don't disappear just because O'Reilly disappears.

BOLDUAN: That's a great point. Great to see you, Brian. Thank you so much. Stick close to this.

The fallout from this Fox News payout reaches all the way to the White House. It is no secret President Trump is a longtime friend of O'Reilly's, appearing on his program more than 20 times since 2003. Just ask Brian Stelter. He counted them up. Watch this.

(BEGIN VIDEOTAPE)

BILL O'REILLY, FORMER FOX NEWS ANCHOR: Do you respect Putin?

PRESIDENT TRUMP: I do respect him.

O'REILLY: Do you? Why?

PRESIDENT TRUMP: Well, I respect a lot of people, but that doesn't mean I'm going to get along with him.

O'REILLY: How are you going to make the Mexicans pay? How? How are you going to do it? They'll want you to be specific.

The state of California led by Governor Jerry Brown is defying you, is absolutely defying the president of the United States.

PRESIDENT TRUMP: So, when the audit is complete, I'll release my returns. I have no problem with it. It doesn't matter --

O'REILLY: But the legal people say you could do it now --

PRESIDENT TRUMP: In the meantime, Bill, in the meantime -- well, no, nobody would recommend that.

O'REILLY: So, things have gone very well this week for Donald Trump, but as you know, every day is an adventure. How do you define Black Lives Matter?

PRESIDENT TRUMP: Well, first of all, I think the term is very divisive. Bill, I didn't tweet. I retweeted somebody that was supposedly an expert and who is also a radio show --

O'REILLY: Why do you want to be in that zone?

PRESIDENT TRUMP: Bill, Bill, am I going to check every statistic? I've got millions and millions of people --

O'REILLY: You're a presidential contender, you've got to check it.

PRESIDENT TRUMP: You know what, fine, but this came out of radio shows and everything else. All it was is a retweet.

O'REILLY: Radio shows? You owe me because I bought you so many vanilla milkshakes --

PRESIDENT TRUMP: Fox put out --

O'REILLY: I bought you so many vanilla milkshakes, you owe me. What are you going to do to Nieto, say hey, you have to pay for the wall to the tune of $2 billion? He's going to say, hey, forget it!

PRESIDENT TRUMP: Bill --

O'REILLY: Putin is a killer.

PRESIDENT TRUMP: There are a lot of killers. We've got a lot of killers. What, you think our country's so innocent?

(END VIDEOTAPE)

BOLDUAN: So, there is that. You also remember President Trump came to O'Reilly's defense against the sexual harassment allegations against him in a very recent interview with "The New York Times," saying this, "I don't think Bill would do anything wrong."

Joining me now, CNN politics reporter and editor-at-large, Chris Cilizza. Chris, do you think those words are going to come back to bite the president?

CHRIS CILIZZA, CNN POLITICS REPORTER AND EDITOR-AT-LARGE: In a normal political universe, Kate, yes. In a political universe in which Donald Trump was elected president, who knows? You know, look, Donald Trump, the defense of Bill O'Reilly part of which you just noted is from "The New York Times" interview, which came out after "The New York Times" reporting on all of this that led to O'Reilly's eventual dismissal. So, it seems odd to me at the time. It seems odder to me now. Trump, I'm certain, didn't know anything specific about these lawsuits.

BOLDUAN: Right.

CILIZZA: He just sort of liked Bill O'Reilly and said, I don't think he would do anything wrong. He's the president of the United States! So, I think it speaks to the connection between these two guys, not only friends, similar backgrounds, similar age -- Trump is three years older, both born and raised in and around New York City, Trump in Queens, O'Reilly on Long Island, but also sort of the approach that they take to life.

[11:20:04]If you listen to Donald Trump's campaign trail speeches, Kate, and then you go and listen to Bill O'Reilly in one of his segments where he just sort of talks to the camera, there's a whole lot of similarities there, and my suggestion is, it went O'Reilly to Trump, not Trump to O'Reilly, that Trump borrowed from O'Reilly.

BOLDUAN: I found that fascinating in your take on this, is that you argue essentially that O'Reilly laid the groundwork for a Trump presidency.

CILIZZA: I mean, I think in a lot of ways he and I think Roger Ailes behind the scenes as sort of the architect of what Fox stood for, did do so. The obvious things are the populism, the anti-elitism, the skewering of political correctness, the distaste for the so-called liberal media.

But then also the sort of O'Reilly bro culture that we now know existed at Fox News. That was given a sort of, man up, come on, this is how we act. There's Trumpism in that.

I think, you know, Trump, you have to always remember with Trump, what is Trump's seminole way in which he brings information in? Cable television.

So, it is not a big logical leap to think that the cable TV network that had huge mindshare among conservatives would be hugely influential on Donald Trump, and I think there's a direct line that can be drawn between the two.

BOLDUAN: I said this yesterday -- as president, maybe he's quickly learning, if you're asked a question, you don't always have to answer it. And when it came to that issue, when it came -- it's hard to not ask from Maggie Haberman and Glen (inaudible), I get that, but that might have been an opportunity.

And that "New York Times" interview did not answer a question, he's going to face questions again. Today he's going to be holding a press conference with the Italian prime minister. Chances are, if he's asked, he reacts to this.

CILIZZA: He probably won't. I think he should say something like, look, Bill and I have known each other for a very long time. That doesn't mean I condone his actions, and I don't know enough about the specifics of these cases to offer any, you know --

BOLDUAN: That caveat is critical and wasn't offered.

CILIZZA: But he won't! I mean, he should have said that with Maggie and Glen, which is, look, I know Bill on a social level, but I can't speak to these things, nor should I as the president of the United States. What's the heart of your question, the reason I pause, Kate, is because, again, my tendency is to analyze it as what would a president do in a situation like that, given his past statements about a person like Bill O'Reilly? But I'm not sure that that holds with Donald Trump.

BOLDUAN: Yes.

CILIZZA: So, might he? Sure. And might he offer a -- I don't want to say full-throated defense of O'Reilly, but might he just repeat, basically that, well, you know, these are allegations and I'm not ever in favor of settling lawsuits because it just begets more -- sure! He might say that.

I mean, you know, if you give me five options, I would say there is a 20 percent likelihood of Donald Trump saying them. If you give me ten options, I'll say there's a 10 percent likelihood of him saying each one. It's literally unknowable to make these predictions with him.

BOLDUAN: I love it, Chris, sticking your neck out there! I love when you take a stand like that.

CILIZZA: Thank you so much, yes.

BOLDUAN: "D," all of the above is what we're going to circle today. Thank you, Chris.

CILIZZA: Thanks, Kate.

BOLDUAN: Talk to you soon.

Coming up for us, was a dreamer just deported by the Trump administration? That is the key question in a potentially huge lawsuit against the government right now, and overseeing that case, his name might ring a bell. He's the same judge Donald Trump attacked in the campaign over his Mexican heritage. We'll discuss.

Plus, you've heard of the nuclear football. Have you heard of nuclear volleyball? Not one, not two, but three courts on a North Korean nuclear test site. Yes, we're all scratching our heads. That's ahead.

(COMMERCIAL BREAK)

[11:28:05]

BOLDUAN: Talk about a strange twist of fate. Remember this from the campaign trail? Listen.

(BEGIN VIDEO CLIP)

PRESIDENT TRUMP: I think the judge has been extremely hostile to me. I think it has to do with perhaps the fact that I'm very, very strong on the border, very, very strong on the border, and he has been extremely hostile to me. This is a case that in our opinion should have been won a long time ago.

It's a case that we should have won on summary judgment. We're nothing with this. We have a very hostile judge. Now, he is Hispanic, I believe, and he is a very hostile judge to me, and I've said it loud and clear.

There should be no trial! This should have been dismissed on summary judgment easily. Everybody says it, but I have a judge who is a hater of Donald Trump, a hater. He's a hater. His name is Gonzalo Curiel.

I have had horrible rulings. I've been treated very unfairly by this judge. Now, this judge is of Mexican heritage. I'm building a wall.

JAKE TAPPER, CNN ANCHOR: So, no Mexican judge could ever be involved in a case that involves you?

PRESIDENT TRUMP: Well, he's a member of a society where, you know, very pro-Mexico, and that's fine. It's all fine, but --

TAPPER: Except that you're calling into question his heritage.

PRESIDENT TRUMP: I think he should recuse himself.

TAPPER: If you are saying he can't do his job because of his race, is that not the definition of racism?

PRESIDENT TRUMP: No, I don't think so at all.

TAPPER: No?

PRESIDENT TRUMP: No. He's proud of his heritage. I respect him for that.

(END VIDEO CLIP)

BOLDUAN: Just to be clear, the judge may have Mexican heritage. He was born in Indiana, the very same state that I'm from. I just want to make sure that one is clear. And again, of course, that was Candidate Trump attacking a federal judge, Gonzalo Curiel, who was presiding over the Trump University lawsuits at the time. Those have since settled.

That very same judge is now tasked with presiding over the case of a so-called dreamer against the Trump administration. He says the dreamer -- he says he was unlawfully deported to Mexico, despite his protected status.

Now it could put that judge and the president once again on a collision course. Let's go first to CNN's Rosa Flores. She's been following this case. Rosa, lay it out for us. What is this case about?